South Florida Exporters Turn Sights On China
Written by Claudio Mendonca on November 4, 2004
By Claudio Mendonca
South Florida exporters are aiming to take advantage of China’s billion-dollar marketplace, predicted by some to become the world’s strongest economy by 2030.
Opportunities in the Far East are seducing Florida businessmen and leaving them suspicious at the same time.
In a series of presentations sponsored by the Miami Free Zone in Doral and FedEx, experts in China affairs spoke last week on the pros and cons of investing.
"There is a great deal of opportunities in China, but the one thing I learned at the seminar is that you have to be cautious and make sure you do your due diligences," said Ray Fernandez, vice president of Omni Security Consultants, a Miami manufacturer of security devices for cargo transport. Because of the huge lucrative business possibilities offered, Mr. Fernandez said, the company is considering exporting to that part of the world.
Gary Wolfson, CEO of Genesis Technology Group Inc. in Broward County who has done business in China for 12 years, said the key to successfully exporting to China is to do a lot of market research. Mr. Wolfson owns a hardware company that imports parts from China and ships them to South America.
Despite hindrances and challenges, Mr. Wolfson said, the upside of investing is limitless.
"The Chinese are changing a generation every four years," said Mr. Wolfson. "They are willing to be goodwill citizens to their own benefit. There is no way a company can ignore China in the 21st century."
China’s thriving economy is opening, with imports growing at an annual rate of 35%. With China the fastest-growing export market for the US, sales were up 28% last year and 75% in the past 3 years. In the same period, American exports to the rest of the world are down 9%.
The Chinese market can offer a vast array of opportunities. One way, experts say, is for American companies to fill a void in that country’s energy supply.
"They are constantly having energy shortages and, therefore, are interested in constructing new plants," said Jeremie Waterman, director of Asian affairs for the US Chamber of Commerce. In addition, the Chinese are interested in environmental, nuclear and information technology, medical devices and services in transportation and logistics. Chinese are interested in raw materials and foodstuffs from Florida.
Mr. Waterman said, however, that the best way to immerse in the Chinese business world is to visit Asia.
Foreign trade experts say Florida companies face obstacles when investing in China.
Mr. Waterman warned at the forum that potential investors should become aware of numerous challenges in the market.
Among those are non-tariff barriers, a stringent regulatory environment, a sometimes murky legal system and contracts that are not always respected.
Additionally, there are cultural differences among the provinces, and the Chinese government can question about confidential of information.
"One of the main challenges companies have to face is that China interprets customs differently from the rest of the world," said Mr. Waterman. "Additionally, competition is heated and profits are often thin."